Recent research from Harvard Business Review reveals a fundamental shift in how companies approach CEO transitions. According to a study by The Conference Board, Egon Zehnder, and Semler Brossy reported in HBR, high-performing companies are now just as likely to change their chief executive as struggling ones—a dramatic departure from traditional patterns where poor performance drove leadership changes.
The data paints a striking picture. Among S&P 500 companies in 2025, CEO turnover in top-performing firms reached 12%, nearly matching the 14% rate among bottom performers. This represents a significant narrowing from the previous year’s 7% versus 18% gap. Overall CEO succession rates climbed to 12.5%, up from a historic low of 9.8% in 2024.
What makes this particularly noteworthy is that forced exits actually declined to 15.2% from 16.3%—the first drop since 2020. As HBR notes, this means most transitions aren’t crisis responses but deliberate board actions to strengthen organizations for an unpredictable future.
Why the Shift?
The HBR article identifies several factors driving this change. Many transitions deferred during pandemic volatility are now being executed, with average departing CEO tenure rising from 7.4 years to 9.3 years. Boards are also recognizing that AI transformation, market uncertainty, and regulatory shifts aren’t temporary disruptions—they’re the new operating reality.
Perhaps most striking, external CEO appointments nearly doubled to 32.7%, pushing internal promotions below 70% for the first time in eight years. Organizations are increasingly seeking fresh perspectives to handle novel challenges rather than relying solely on homegrown talent.
Seven Essential Steps to Begin Succession Planning
Building on the insights from the Harvard Business Review article, forward-thinking leaders can start building robust succession processes today:
What is succession planning? Succession planning is creating a detailed roadmap for replacing your company’s CEO and other critical leaders—like your CFO, COO, CTO, and other C-suite executives—when they leave, retire, or move to different roles. Think of it as having a backup plan for your most important positions so your company can keep running smoothly no matter what happens.
Step 1: Add succession planning to your regular meeting schedule.
Put succession planning on your calendar as a recurring topic, not something you only discuss when someone quits. Here’s how:
- Add a 15-minute “leadership pipeline review” to every quarterly board meeting
- Schedule a full 2-hour succession planning session once per year
- Create a simple checklist that asks: “Who could run each C-suite role if that person left tomorrow?” Review this list every six months
- Assign one board member to be the “succession planning champion” who makes sure these discussions actually happen
- Document each discussion in meeting notes, including any concerns or action items
- Prioritize by asking: “Which roles would hurt us most if left empty?” Start planning for those positions first
Step 2: Write down your emergency backup plan.
Create a written document that everyone can follow if a key leader suddenly leaves. Your plan should include:
- Names of people who could step in temporarily for each critical role (CEO, CFO, COO, CTO, CMO, CHRO, CRO)
- A description of what each backup person’s responsibilities would be during the emergency
- Instructions for redistributing urgent tasks if no internal backup exists (Who approves major expenses? Who talks to the bank? Who handles payroll?)
- Contact information for executive recruiters who specialize in different types of roles (finance, operations, technology, etc.)
- A communication template for announcing the change to employees, customers, investors, and vendors
- Store this document where board members and top executives can access it immediately
- Update the document every January and whenever someone on the list changes roles
Step 3: Evaluate your potential future leaders every year.
Create a structured way to measure if your internal candidates are ready to step into leadership roles. Here’s what to do:
- Make a list of critical positions that need succession plans: CEO, CFO, COO, CTO, CMO, CHRO, CRO, and any other roles specific to your business (like Head of Manufacturing or VP of Sales)
- For each critical position, identify 2-3 internal people who might fill that role someday
- Rate each candidate on key skills using a simple 1-5 scale: strategic thinking, team leadership, technical/functional expertise for that role, crisis management, and communication skills
- Write down specific examples of what they’ve done well and where they need improvement
- Identify one major project or learning opportunity each person needs to be fully ready for that specific role
- Set target dates for when you think each person could realistically take over (ready now, ready in 2 years, ready in 5 years)
- Review and update these assessments every December
- Pay special attention to roles where you have NO internal candidates—these are your highest risk positions
Step 4: Grow multiple leaders who could step up.
Don’t just prepare one person for each role—build a deep bench of talent across your entire leadership team. Take these specific actions:
- Identify high-potential leaders two or three levels below each C-suite position (vice presidents, directors, senior managers)
- Pair each high-potential person with a board member or senior executive who meets with them for lunch or coffee twice per year
- Give these rising leaders projects that expose them to different parts of the business (if someone only knows finance, have them work on an operations or marketing project)
- Create cross-functional training where your finance leaders learn about operations, your operations leaders learn about sales, etc.
- Include rising leaders in board meetings or executive sessions once or twice per year so they understand how governance works
- Send them to executive education programs at business schools or leadership conferences
- Create a written development plan for each person that lists specific experiences they need for their target role (like: “CFO candidate needs investor relations experience,” “COO candidate needs to lead a major process improvement project”)
Step 5: Track who’s available to hire from other companies.
Even if you want to promote from within, you need to know what’s happening in the broader job market for ALL your critical roles. Do this:
- Create a spreadsheet with separate tabs for each critical role (CEO candidates, CFO candidates, CTO candidates, etc.)
- List 10-15 potential external candidates for each role (executives at competitors, other industries, or former colleagues)
- For each person, note their current role, company, approximate age, recent achievements, and estimated salary range
- Research which leaders at competitor companies are likely to retire or move soon
- Subscribe to industry newsletters that report on executive moves and leadership changes
- Attend at least two industry conferences per year where you can meet potential candidates
- Build relationships with executive search firms that specialize in different functions (finance recruiters, technology recruiters, operations recruiters, etc.)
- Request an annual “talent market report” from recruiters showing who’s available and what salary ranges look like for each role
- Update your external candidate lists every six months
Step 6: Write down what skills your next leaders need.
Create a clear, written description of what capabilities your future leaders must have FOR EACH CRITICAL ROLE. Include:
- 8-10 specific skills or competencies needed for each position (A future CFO needs: “Experience with financial systems transformation,” “Track record raising capital,” “Strong relationship with auditors and investors.” A future CTO needs: “Cloud migration expertise,” “Cybersecurity knowledge,” “Team building in competitive talent markets.”)
- Prioritize your list for each role—mark which skills are absolutely required versus nice-to-have
- Explain WHY each skill matters for your company’s specific situation and future goals
- Update these lists every year as your business strategy changes (technology needs evolve quickly; compliance requirements change; market demands shift)
- Use these documents to evaluate both internal and external candidates objectively
- Test candidates with real scenarios relevant to that role: “How would you handle X situation?” rather than just reviewing their resumes
- Make sure the skills needed complement your overall leadership team (if your CEO is visionary but not detail-oriented, maybe your COO needs strong operational discipline)
Step 7: Plan how you’ll communicate leadership changes.
Prepare your messaging before you need it so you’re not scrambling during any leadership transition. Create:
- Template announcements for employees explaining why ANY leader is leaving and what happens next (customize templates for CEO, CFO, and other C-suite roles)
- Template messages for customers or vendors who work closely with specific leaders (especially important for customer-facing roles like CRO or Head of Sales)
- Talking points for investors about how each type of transition supports long-term strategy
- A FAQ document answering common questions like: “Why now?” “How was the successor chosen?” “What changes should we expect?” “Will this affect my job/project/relationship with the company?”
- A timeline showing when different groups will be told for each type of transition (board first, then executive team, then all employees, then public announcement—timing may vary by role)
- Assign specific people to handle media inquiries, employee questions, customer concerns, and vendor relationships during any transition
- Frame every transition message as “moving forward strategically” and “ensuring continuity” rather than “something went wrong”
- For roles with external relationships (CFO with banks, CTO with technology partners), include specific communication plans for those stakeholders
The Path Forward
As the Harvard Business Review research demonstrates, organizations that treat succession planning as an ongoing strategic discipline rather than an occasional necessity position themselves for sustained success. By embedding these practices into governance rhythms, boards can ensure every transition strengthens rather than disrupts their organizations.
To help you with your succession planning, we’ve created a 5FT View Succession Planning Tracker to guide you. It is available under Resoures on our website: Click here.
In today’s environment of constant change, the question isn’t whether your organization will face leadership transitions—it’s whether you’ll be strategically prepared when those moments arrive.
Source: This article was inspired by “Why CEO Turnover Is Rising in 2025” published in Harvard Business Review, featuring research from The Conference Board, Egon Zehnder, and Semler Brossy.
